Role of private sector in driving economic growth takes centre stage at 5th KOAFEC
The first Public-Private Partnership Forum at the 5th Korea-Africa Economic Cooperation (KOAFEC) Ministerial Conference wound up in Seoul last week with calls on Korean businesses to invest more in Africa. During the meetings, the low level of trade between Korea and Africa came under the spotlight, highlighting opportunities for Korea’s private sector to venture into Africa.
Korea’s exports to Africa represented just 1.5% of its total exports in 2015, while Africa’s exports to Korea accounted for only 1.2% of total imports. “A lot more can be done,” Akinwumi Adesina, President of the African Development Bank, told the gathering of business and government leaders.
Noting that the bulk of imports from Africa comprised of raw materials such as petroleum products, natural gas and copper, he underlined the need for Africa to add value to its exports in order to be competitive.
“There is need for more value added exports from Africa to Korea, and Korea can help Africa in the development of regional and global value chains for processing and adding value to its exports,” Adesina said. “This will help reduce Africa’s exposure to global commodity price volatilities, while expanding trade with Korea.” He urged Korea to support Africa through public-private partnerships that would develop special economic zones and industrial parks, especially for light manufacturing. The president cited Korea’s successful experience in agricultural transformation, which he said puts it in a competitive position to support Africa’s push for agro-allied industrial development. “This could include investments in the development of rural infrastructure, agro-industrial complexes, post-harvest management and processing and fertilizer manufacturing,” he stated.
Uzziel Nadagijimana, Rwanda’s Minister of State in the Ministry of Finance and Economic Planning, underscored the need for governments to institute policy reforms that make conducting business in Africa favourable. “A good business environment will drive private firms to set up businesses in our countries.” A new World Bank index on ease of doing business ranks Rwanda among the top places to do business on the continent.
According to Sang-mok Choi, Korea’s First Vice-Minister in the Ministry of Strategy and Finance, private sector investment goes hand in hand with technology skills and knowledge transfer. He reiterated Korea’s commitment to support to Africa in skills development. Choi described KOAFEC as a platform through which Korea will share its experiences in economic transformation with Africa to achieve mutual prosperity.
South Korea has risen to become the 11th largest economy in the world. “We want to share our experience; how we did it to rise to the top; how we leveraged private sector to achieve economic growth. We want the same for Africa,” he said.
At the 5th KOAFEC Ministerial Conference, Korean authorities committed to assist Africa’s development through the AfDB’s transformation agenda, which is hinged on five priority areas (the High 5s). These seek to improve energy access, transform agriculture, enhance industrialization, and integration and to improve the quality of life for the people of Africa.